Outdated laws governing scrap metal trade – audit

… revenue leakage suspected

The laws governing the scrap metal trade need to be completely revamped, according to recommendations emanating from the forensic audit report into the operations.

The report was officially released on the Finance Ministry’s website and cited a number of irregularities and uncertainties surrounding the trade, including the fact that the laws governing the operations are severely outdated.

The unit has its origin in the Old Metal Dealers Act Cap. 91:08 first promulgated in 1900. Supervisory responsibility for the unit was transferred from the Ministry of Tourism, Industry and Commerce to the Central Housing and Planning Authority (CHPA) by virtue of the 2012 Cabinet Paper dated January 31, 2012.

The CHPA is conferred with specific statutory powers and duties which do not include the regulation of the business of dealers in Old Metals, as described in the long?title of the Old Metal Dealers Act 91:08.

The report has recommended there be widespread consultation with key stakeholders before any concrete decisions are taken on the way forward in relation to the operations.

The document pointed out too that interim measures must be put in place since the trade is currently at a standstill and exports are temporarily banned.

Last year, scrap metal dealers pleaded with the government to quickly resume the trade, noting that the closure of their businesses has definitely reduced their earnings, thus denying them a comfortable living.

The audit, which was conducted by Ram & McRae Accounting Firm, found that there is no consistent policy towards the trade, with government opening and closing the trade at will.

It noted too that there seems a total lack of coordination between and among the four agencies involved: the Guyana Police Force, the Ministry of Business, the Scrap Metal Unit, and the Guyana Revenue Authority.

The report said it is unclear why responsibility for the trade was transferred to CHPA and why no Export Duty is paid under the Customs Act.

It suspected that there is a high probability of revenue leakage but because of the inadequate reporting, any estimate is merely speculative.

Prior to the official release, Guyana Times published articles on the contents of the report after soliciting a leaked copy.

Former Housing Minister Irfaan Ali had explained that the Unit was transferred for better management given that both sectors had one Minister, and the Scrap Metal Unit and the Enforcement Unit of CHPA were both viewed as having the capacity that can be interdependent in order to police the system.

“You may recall that one time there was tremendous vandalism of property, even phone lines and so on as it related to the scrap metal trade, so an enforcement arm became necessary for the Scrap Metal Unit,” Ali pointed out, noting that instead of establishing another enforcement arm, a decision was made to bring it over to the Housing Ministry for more integration.

Furthermore, the then head of the Scrap Metal Trade Unit Taslim Baksh had argued that the findings in the report are not justified.

Meanwhile, the report also cited instances of illegal trade: “Inspectors and enforcers would visit unlicensed yards but we were informed that they do not observe the transfer of metals to licensed yards.”

Former Junior Communities Minister with responsibility for Housing Keith Scott had stated that anyone found to be not guilty of illegal trading, they would be allowed to resume their operations, while the others would be dealt with accordingly.